Media Governance、Nature Of Ownership And Corporate Value

The term "corporate governance" has been known to the public for over three hundred years ever since Adam Smith, in his Wealth of Nations, firstly stated a series of problems existed in stock companies as a result of separation of ownership and management power. Corporate governance mainly dealt with the internal governance issues with focuses on the interrelation among board of directors, management and shareholders at early stage. However, in recent years, higher attention has been paid to the external corporate governance with the outbreak of Asian financial turmoil and financial crisis in Russia, and also the bankrupt of large companies in the US such as Enron and WorldCom due to scandals. In fact, corporate governance is the combination of internal and external governance. For external governance, the role of media cannot be ignored for it is the most important information transmission channel and its influence on economy and society increases, particularly in modern information society. The scandal of Yinguangxia and shady deal of fund in2001, Sanlu milk power incident in2008and the event of Wuliangye on suspicion of related party transaction and illegal operation, are all revealed by media into public attention and eventually handled by associated authorities under supervision of media. As an essential external governance mechanism, media has profound influence on capital market indeed. But, whether media governance affects corporate value? Its effect on companies of different nature the same? Or the influences on corporate value differs from one another under media governances of different modes? These are all worth deep exploration.Based on corporate governance theory, this paper deeply studies the relationship between corporate value and media, which is an external governance element, and the relationship hereof after include the ownership nature, which is an internal governance element, also probes the essential theoretical significance and practical value of the impact that external and internal governance have on corporate value today. In the beginning, the paper investigates the influence of media governance on corporate value, followed by revealing their relationship with intervention of ownership nature through theoretical analysis and demonstration proof-test. This research shall not only enriches the theory with respect to the impact of media governance on corporate value, but provides abundant research evidence of listed companies in Chinese capital market for related studies.The paper consists of five parts with details provided as follows:Chapter one is introduction. The background, significance and methods applied for the research, together with its innovation and defects are provided in this part.Chapter two reviews and commentates on the present status of research on the relationship among media governance, ownership nature and corporate value at home and abroad.In chapter three, a detailed analysis of corporate governance theory is conducted from the perspective of internal and external governance respectively.Chapter four implements an empirical analysis on media governance, nature of ownership and corporate value. Through investigation of the impact on corporate value brought about by external governance and internal&external governance under the two media governance modes-newspaper report (reporting times) and microblog post (posting volume) respectively, the results are obtained.Chapter five comes to the conclusions and puts forward proposals accordingly.The conclusions of the paper are as follows:Firstly, whether measured by reporting times of newspaper or posting volume of microblog, media governance shows a significantly positive correlation with corporate value, i.e. the corporate value rises in line with better level of media governance, which confirms the influence of external governance upon corporate value.Secondly, when media governance is measured by reporting times of newspaper, the influence of newspaper report on corporate value of state-owned listed companies is relatively weaker than on that of non-state-owned listed companies. The reason might be newspaper is subject to the supervision and control of the government to a greater extent, therefore, compared to non-state-owned enterprises, the media coverage on state-owned enterprises are more restricted and consequently the influence of media governance on state-owned enterprises is weakened.Thirdly, when media governance is measured by posting volume of microblog, the influence of media governance on corporate value, whether to state-owned enterprises or non-state-owned enterprises, has no significate differences. It is possibly because microblog is more difficult to be included into government regulation and free speech herein is less restricted compared to other pressed like newspaper. As a result press report about state-owned enterprises is less restrained by government and the influence of media governance upon corporate value will not be weakened accordingly. This indicates that the effects on the value of listed companies are different under media governance in our country due to the difference in ownership nature.The main contribution and innovation of this paper lie in the following:Firstly, by adopting the indexes of reporting times on newspaper and posting volume in microblog for measurement of media governance, it is found that in the conclusion, the impact on corporate value split under different media governances while including nature of ownership, which is a regulated variable. Newspaper report is influenced by nature of ownership-whether the reported subject is state-owned for non-state-owned, while microblog is to the contrary. This indicates that the final reflected problems and effects of different media communication modes are not the same due to the degrees of government regulation on them.The second contribution is the data of listed companies in Chinese capital market. The studies of the impact of external governance on corporate value by foreign scholars are abundant and deep, and little are studied by domestic scholars. Meanwhile, in our country and overseas, there is a significant difference in respect of majority stockholders of listed company and nature of media units, which leads to the different results of impact of media on corporate value under different backgrounds. So the study of this paper not only enriched the theory with respect to the impact of media governance on corporate value, but provided abundant research evidence of listed companies in Chinese capital market for related studies.Thirdly, as to the research perspective, this paper investigates the corporate governance’s influence on corporate value from the perspective of external governance with combination of both internal and external governance. So the research of this paper is from a new perspective. In addition, the previous studies usually choose reporting times of news by newspaper of finance&economics as external governance element for relevant studies and have not taken the Internet into consideration. However, it is undeniable that as a new communication form, the Internet has been the public’s main access to information and is more timely and efficient with enormous power of influence, which is the reason of applying posting volume of microblog for measurement of media governance’s influence on corporate value.